The purchase will help both utilities diversify suppliers, as they currently purchase most of their thermal coal from Australia, said Eiji Maekawa, general manager of Kansai Electric’s oil and coal purchasing group. Kansai Electric bought 3.9 million tons of thermal coal last fiscal year, about 71% of which was from Australia, Maekawa said. About 66% of 6.2 million tons of thermal coal that Kyushu Electric bought in the year ended March came from Australia, and 22% came from Canada, according to Tetsuo Shuto, assistant manager in the business promotion group.

Oxbow will likely supply this coal from the company’s Elk Creek longwall mine in Somerset, Colo. The coal will likely be shipped by Oxbow from the company’s southern California port facilities.